Discuss what you learned in the T.R.E.C. & Severity / Exposure Codes.

Discuss what you learned in the T.R.E.C. & Severity / Exposure Codes. This discussion is focused on what you learned about T.R.E.C. & Severity / Exposure Codes and risk assessment. It relates directly to Chapter 11, Review Question 5. This is is a multi-part problem which seems to give some students problems. The first part is to figure out the severity code. Then analyze the facts in the question to figure out the exposure code. Finally, run the formula in the chapter to see how much is really at risk over the life of the system. It will be a lot more than you, at fist, think and should provide some insight about how much is really at risk, which relates to the amount of insurance needed for the operation. (Remember our discussion about the “real” cost of safety at the beginning of the course?) Let’s start with the severity code.
What did you decide the Severity Code should be and how did you determine it?
Next, what is the exposure code, and how did you determine it?

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